Mon, Sep 16, 2019
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Sancus Capital's Chernova pioneers a new way forward for CLO refinancing

Monday, July 01, 2019

Bailey McCann, Opalesque New York:

Investor interest in CLOs is on the rise and Olga Chernova, Founder and CIO at Sancus Capital Management is working to make the market more transparent. Alongside her work at Sancus, Chernova developed a process that is designed to make CLO refinancing easier and open to more market participants.

The process, called 'applicable margin reset' (AMR) uses a modified dutch auction to set a new interest rate for eligible CLO securities. Once a CLO has exited its non-call period, usually two years after the CLO has been created, equity holders can improve returns by refinancing to a lower interest rate. Refinancing volume has grown significantly in recent years as the size of the CLO market has grown. As investors continue to pile into hot areas like direct lending or middle market credit which use CLOs, volume is likely to remain high.

Chernova has created an independent company called KopenTech which will manage the auction process on its platform. After the auction is finished the results are made public.

According to Chernova, the modified auction process is open to the broader market and can lead to better refinancing rates. Underwriters and ratings agencies are not required, which can cut down on the cost of refinancing as well. By using an auction, market participants can plan refinancings, resets, and new issues with more information. Auction data can also be used to understand which broker-dealers bring the mo......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Albright Capital builds on emerging markets impact strategy, signs on to IFC principles[more]

    Bailey McCann, Opalesque New York: Albright Capital has adopted the International Finance Corporation's Operating Principles for Impact Management. The firm has also developed its own impact measurement system as part of the implementation of the principles. The IFC's principles were

  2. Investing: Hedge funds getting burned as growth stocks trounced by value, Why investors are prioritizing health care in a big way, Fannie, Freddie soar as hedge funds score wins on two fronts[more]

    Hedge funds getting burned as growth stocks trounced by value From Bloomberg: A hedge-fund favorite is rapidly losing ground in the stock market just as one of the industry's least-loved sectors picks up. Growth stocks, generally companies that are seeing rapid profit increases, have drop

  3. PE/VC: Supersized unicorn: Root Insurance leaps to $3.65bn valuation with $350m round[more]

    Root Insurance is now valued at $3.65 billion after a $350 million funding round - the largest single venture capital round ever in the state. The 3-year-old auto insurer, now the startup with the highest valuation of any in Ohio, has raised a cumulative $523 million in VC and another $100 mi

  4. Testing hedge performance when stocks crash[more]

    Bonds have historically been a reliable buffer for stock exposure. But low yields and potential reversion to a more positive stock/bond correlation would likely translate to less protection. Gold has been a solid crisis hedge but has experienced long stretches of negative inflation-adjusted returns.

  5. PE/VC: The FBI is investigating a venture capital fund started by Peter Thiel for financial misconduct, Why venture capital firms need more women partners and entrepreneurs[more]

    The FBI is investigating a venture capital fund started by Peter Thiel for financial misconduct From Vox: Federal investigators are probing the conduct and practices of Mithril Capital, a venture capital firm co-founded by Peter Thiel, Recode has learned. US officials - including t